Name: The new US tax law, explained with cereal
Uploaded: 2018-01-18T05:06:58.000Z
Duration: 3 min 9 s
Description: Thousands of YouTube videos with English-Chinese subtitles! Now you can learn to understand native speakers, expand your vocabulary, and improve your pronunciation...

Ever since they won control of the government in 2016,

Republicans have been obsessed with getting this one thing done.

We're going to have a phenomenal tax reform.

They've passed a bill, the President has signed it,

so let's break down what's actually going to change.

Imagine that instead of getting paid in dollars,

The government takes a certain amount of cereal in taxes.

And it uses it to pay other people to do things

build roads, fly fighter jets, do research.

The more you earn, the bigger the share of your cereal the government takes.

Sometimes the government wants to incentivize you to do certain things with your cereal.

Like if you buy a house for a hundred pieces of cereal,

and then sell it for 200 pieces of cereal,

you'd normally have to pay capital gains taxes on that profit.

But there's a special loophole that says you don't have to.

The tax code is full of loopholes like this,

which means if everyone puts their cereal together,

One that the government dips into for taxes,

Now, Republicans want the government to take a smaller portion.

And they say they want people to keep more of the cereal.

But if they do that, the government won't have enough cereal to pay for what it needs.

So part of this new law is taking some of the cereal that's not taxed,

and change the rules so that it is taxable.

That way, the government can take a smaller share of the cereal

This is what politicians mean when they talk about "broadening the tax base."

Republicans aren't broadening the base enough.

They're taking a lot less cereal from people

but not enough to pay for what the government needs.

To pay for that stuff, the government is going to have to go into debt.

This means they're going to have to take even more cereal, years in the future,

to pay back the debt they're taking out now.

the total amount of cereal available to both tax payers and the government.

So what happens to that 1.5 trillion dollar gap?

If you break the population into five equally sized groups

and look at how much each group will earn in 2018,

and you can see that lower and middle class Americans

will actually pay more since their tax cuts aren't permanent.

And if you break that top group into smaller groups

you can see the very wealthiest benefit most of all.

So while this new law does close some loopholes to bring in new tax revenue,

the bill's larger purpose is to realize the Republican vision of a fairer tax code.

One in which the wealthiest pay a lot less.